Why Nordstrom, RH, and Applied Optoelectronics Jumped Today

By Dan Caplinger Markets Fool.com

The stock market mounted a last-minute rally to keep its string of winning days alive, as all three major market benchmarks recovered from losses during most of the day to close higher. The performance again showed the complete confidence that investors seem to have in the market's longer-term future, despite the fact that some believe that stocks have generally risen too quickly and have been hoping for a pullback. Enough investors seem to be waiting for an opportunity to buy that losses have generally been muted and short-lived. Moreover, some good news sent many individual stocks higher, and Nordstrom (NYSE: JWN), RH (NYSE: RH), and Applied Optoelectronics (NASDAQ: AAOI) were among the top performers on the day. Below, we'll look more closely at these stocks to tell you why they did so well.

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Nordstrom celebrates a record performance

Nordstrom shares rose 6% after the company reported its fourth-quarter financial results on Thursday afternoon. The high-end department store retailer said that its sales rose 3%, pushing net income up by 12% from year-ago levels. However, comparable-store sales fell by 0.9% during the quarter, capping a year in which comps fell 0.4% overall. The discount Nordstrom Rack brand continued to carry the load for the retailer, while the namesake Nordstrom premium stores saw even worse performance on the top line. Despite guidance that was tepid at best, investors were pleased with Nordstrom's record full-year sales in 2016, and they seem to believe that the premium retailer will be able to keep its reputation intact even while facing considerable headwinds looking ahead.

Image source: Restoration Hardware.

RH makes a good prediction

Investors celebrated the retailer formerly known as Restoration Hardware's preliminary performance results for its most recent quarter, sending the stock higher by 24%. The home furnishings retailer said that it expects adjusted net revenue to come in at $590 million, which is near the top end of its previous guidance range. Moreover, adjusted earnings of $0.68 per share would be higher than most investors had expected, and also near the top of its $0.60 to $0.70 per share prediction from late last year. CEO Gary Friedman noted that RH is "now through the most uncertain stage of our transformation" and that the moves it has made to launch new businesses and creating a membership model "will strengthen our brand and position the business for accelerated growth in 2017 and beyond." Investors agreed, and although plenty of questions remain, RH has gotten beaten down so far that even a bit of good news was enough to make shareholders happy.

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Applied Optoelectronics rides data-center demand higher

Finally, shares of Applied Optoelectronics jumped 23%. The provider of fiber-optic network products for data centers, cable broadband, and telecom providers had another record year, with fourth-quarter revenue soaring 60% from year-ago levels. Adjusted net income nearly quadrupled to $0.84 per share, and the company expects first-quarter results to be similarly upbeat as 2017 begins. CEO Dr. Thompson Lin attributed the positive performance to Applied Optoelectronics' ability to manufacture key products internally, and efforts to streamline its manufacturing process to make it as efficient as possible have paid off handsomely. With the transition to 100G continuing in 2017, Applied Optoelectronics believes it can keep making headway well into the future.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Nordstrom and RH. The Motley Fool has a disclosure policy.